1. Field of the Invention
The present invention relates to a syndication loan management and administration system for tracking information related to a syndicated loan. More particularly, the present invention relates to a multiuser system for accessing and manipulating data related to a syndicated loan, including investor, borrower and institution information.
2. Description of the Prior Art
Financing of a large commercial endeavor typically requires leveraging a large amount of financial resources to support creation of a commercial entity. A planned commercial endeavor will typically involve a number of individuals responsible for initiating and managing the endeavor through its various phases, including inception of the commercial entity. These individuals will typically seek debt based financing, such as commercial loans, to support the initial development of the commercial enterprise. The types of commercial loans needed are typically large and require a significant amount of resources to properly complete the funding transaction. For example, if individuals representing the entity approach a large commercial bank for a commercial loan, the bank generally needs to obtain proper assurances from the borrowers before money can be loaned. Such assurances could include items such as collateral, loan insurance or the like. In addition, the commercial bank must organize resources sufficient to meet the needs of the borrowers and structure the loan in a way which meets the needs of the borrowers.
Lending institutions such as commercial banks typically have limits to the amounts of funds they wish to commit to any one commercial undertaking. These loan limits are often less than the total amount of financing a commercial undertaking requires to initiate an enterprise. By organizing a number of banks or lenders to finance the undertaking, the required funds can be obtained while limiting the exposure of individual lending institutions. One way of organizing a group of banks or lenders is to form a loan syndicate which has as members a number of commercial lending institutions. The loan syndicate can underwrite large commercial loans, while spreading risk and liability among the various members to lessen the impact of any risk associated with the large commercial loan.
A syndicated loan involving a number of lending institutions involves the handling of a large amount of data related to various aspects of the syndicated loan. For example, the loan resources to be used, or facilities, typically need to be tracked and evaluated for availability, amounts available, future demands on the facility and so forth. Information related to the members of the syndicate group, or investors, also needs to be tracked and updated as a loan evolves. Activity related to the borrowers such as payment amounts, expected dates of payments and so forth must also be tracked. In addition, details related to regulatory requirements must be tracked and reported to appropriate authorities, such as required tax payments.
A syndicate manager is typically one of the lending institutions in a syndicated loan group, that carries the administrative burden of managing the syndicate loan over its lifetime. The manager, or agent, will usually be paid fees out of the loan transaction to offset the administrative burden, which can be significant. The agent has extensive duties before and after closing a syndicated loan deal, many of which include regulatory reporting requirements.
As a syndicated loan is completed, an opportunity for loan trading is presented among the various lenders holding loan assets during the lifetime of the syndicated loan. Loan trading presents a further administrative burden on the syndicate manager, which must track changes in ownership.
An institution that wishes to become a syndicate manager will usually endeavor to attract potential lenders and evaluate the interests of borrowers to provide an attractive package for the two parties. Success in becoming a syndicate manager often depends on adroitly organizing contact information to facilitate a market monitoring process between lenders and borrowers.
Once a borrower sets a desired funding amount, and a potential syndicate manager begins soliciting lenders for organizing a loan syndicate, proposals need to be organized and shared with all potential lenders. A typical proposal includes voluminous legal documents that a manager must ensure specify all the proper terms and conditions of the loan agreement.
After a syndicate loan has closed, the manager acts as the administrator between lenders and borrowers, and provide funding updates and notifications as agreed. Typically, a number of lenders are involved with the updates and notifications, requiring the syndicate loan manager to expend a number of resources providing paper notification by courier or facsimile at given intervals or on agreed dates. As the loan matures, further functionality is desirable, such as sharing data with other systems, analyzing loan parameters and providing further access and integration with desktop type systems.
Syndicate loan managers typically find it difficult to assemble a group of banks to collaborate on a single credit transaction. Once a group of lenders is assembled, it is further challenging to coordinate the group during the lifetime of the loan. The present market for syndicated loans demands greater sophistication and complexity, in addition to more capability and flexibility, than any present system can provide.
It would be advantageous to any syndicate loan manager to have a tool to efficiently handle the demands of loan administration, while providing functionality for new possibilities of communication, including the Internet, in a single package. Presently, there is no known system that can deliver the needed functionality in a complete and efficient manner in a single package to handle the complexities and sophistication of these types of deals in their present form. Accordingly, there is a need for a multi-user sophisticated syndicated loan management system which has high reliability, efficiency and accessibility.